>> - use the regular i386 installer to install to a partition and then
>>   boot this partition as a domU
>
> I plan to provide a domU-install kernel for this. In my usage, I would 
> delegate
> administration of some domU guests to some other peoples. They may want to
> partition the disk space (that is, a partition in the domain 0's disks) I
> allocated to them. An install kernel with the embeded ramdisk is the 
> easiest
> way to do this. This will probably mean that I'll also have to build linux
> install kernels :(

Yes, I think this is the 2nd best way to install domUs.  I prefer something 
like debootstrap on Debian which lets you make an install to a directory. I 
have a tree which builds an install kernel and a ramdisk and also includes 
changes to the installer.  I can probably find the tree if you want those 
changes...

     christian